Question

Corporate oil CEOs want self-regulation versus Government wanting regulations to be enforced. What would be your opinion?

Answer 1

Without loss of generality, a free market mechanism with no external regulation tends to work best.

Practically speaking, we have seen that in a pure and unregulated scenario, the rich get richer

and the strongest firms abuse their powers to prevent competitors from existing.

That is why some amount of regulation is essential. It is particularly true of an essential good like oil.

By and large, the dominant firms control more than 50% of the supply of oil around the world.

Left to themselves, they would raise the prices so high that it becomes unaffordable to most people.

Hence, the government has to step in and fix a framework within which oil corporations could operate.

The regulations should not be stringent and should allow plenty of flexibility for firms to decide their strategies

and promote their business interests.